Suzuki Unveils Big Plans for US Market - 2004-03-14

The Japanese automaker Suzuki has announced plans to triple its U.S. car and light truck sales by 2007. The company has a tall order to fill.

The American branch of Suzuki has embarked on an ambitious three-year plan to turn the company's fortunes around. American Suzuki's automotive marketing director, Tom Carney, says the plans involve some very basic self-examination.

"'What are these products? Who is the buyer? Why would they buy? And then, from that vantage point, we create the brand," he said.

In the United States Suzuki has had an up-and-down existence. Its best year was 1987 when it sold more than 83,000 units. By 1990, that figure has plummeted to just over 20,000.

Last year, Suzuki sales - at 58,000 vehicles - represented a nearly 14 percent decline from 2002. Now the company is working to turn that around.

As with any struggling carmaker, Marketing Director Carney agrees that the key to a turn-around is the vehicles themselves.

"You've got to have the right product at the right place at the right time," he said. "And Suzuki recognizes that. And, with our purchase of GM DAT - Daewoo Automotive Technology, that's what that stands for - it allows us to bring in new product into the United States, two of which are already here - the new Forenza and the Verona."

How is Mr. Carney's company able to re-badge the Korean Daewoo products as Suzukis? No problem, he says.

"We are 15 percent owners of that corporation. We own the assets," he said. "GM [General Motors] owns another 47 percent and the balance is owned by a consortium of banks. So, we like to look at them as Suzukis."

In addition to the two already in its showrooms, Suzuki has unveiled a third, the Reno, which goes on sale later this year.

Iceology is a Los Angeles consumer research and trend consulting firm specializing in the auto industry. Iceology's Wes Brown sees a major challenge ahead for Suzuki.

"The consumer perception for the Suzuki brand is one of it being relatively low-quality and cheap," he said. "It's an incorrect perception, but that's what it is. And, unfortunately, perception is the way the consumer market often moves when it comes to what sells."

Mr. Brown compares Suzuki's image with the Korean brand Hyundai of several years ago.

"Hyundai would constantly score very poorly in lots of surveys because the people who owned them hated the fact that they had to own a Hyundai because it meant they weren't successful," he said. "Suzuki doesn't suffer from that much "baggage", but it does have some of that perception by the average consumer."

So Suzuki has an uphill battle to achieve its goal of tripling U.S. sales.